What is the amount of your loan? What is the weekly instalment on your loan, as written in your contract? (% of respondents) Adjusting for collection As written in of savings (Rs. 12) in Within 10% of their Right Answer 96.5% loan contract the South weekly amount Wrong Answer 3.5% Right Answer 42.5% 66.0% 84.5% What is the duration of your loan? Wrong Answer 52.0% 28.5% 10.0% (% of respondents) Tried But Does Not Know 0.0% 0.0% 0.0% Right Answer 89.0% Did Not Try and Does Not Know 1.5% 1.5% 1.5% Wrong Answer 11.0% Blank 4.0% 4.0% 4.0% 1 Sa-dhan is an association of microfinance institutions in India. The voluntary code of conduct is available here: http://www.sa-dhan.net/corevalues.pdf Annualised Interest per Rs. 1,000 of Loan, as Annualised Rate of Interest, as reported by reported by respondents 80 respondents % in Frequency 80 Interest 60 North - Frequency Interest in 60 in North- 40 18% South- Rs. 40 Rs. 180 % in South- 150 20 20 15% 0 0 1 1.2 1.25 1.5 2 2.3 2.5 5 6 10 14 15 21 -999 -444 25 50 100 125 150 175 200 250 -999 -444 -111 Interest per Rs. 1,000 of loan (in Rs.) annualised rate of interest (in %) -999: Did not try and does not know -444: Tried and does not know What is the total interest on this loan that you are required to pay over the time of this loan? Right Answer 13.5% Wrong Answer 48.5% Tried But Does Not Know 16.0% Did Not Try and Does Not Know 21.0% Blank 1.0% (% of respondents who said the Scenarios action was appropriate) In case Lakshmi is not able to pay her loan and centre manager 42% insists on holding the meeting outside her house. What do you think about the centre manager's action? If Lakshmi doesn’t repay her loan in your group, do you think its 45% appropriate to extend the meeting for another 30 mts to enforce the repayment? If Lakshmi doesn’t repay her loan in your group, do you think its 33% appropriate to extend the meeting for another 3 hours to enforce the repayment? Lets say that Lakshmi is not able to repay her loan. Would it be 54% okay for the MFI to take any of her assets, such as for instance, any cows she owns, her house her land or machinery she uses for work? Table 1 – Business characteristics of sample population Percentage Average Profits per day* of amount Detail respondents purchased* 1. One trip a day to the market- normal days 89.7% Rs. 1075.3 Rs.110.5 (589.2) (54.7) 2. Twice or more trips a day( total amount 8% Rs.707.5 Rs.95.6 purchased per day) (422.6) (46.1) 3. Once in two days trip to the market 2.3% Rs. 1034.8 Rs.97.2 (amount purchased per trip) (515.8) (44.3) 4. Good days a week 98.9% Rs. 1666.3 Rs. 186.6 (834.3) (83.4) 5. Festival days 91.5% Rs. 2580.7 Rs. 318.2 (1543.7) (187.3) Table 2 – Buying on credit 1. % of sample size that buys goods on credit 40% 2. % of sample size that buys goods on credit for more than 15 days a month 34.6% 3. Average number of days in a month that the respondent buys goods on credit 19.9 days 4. Average number of years of buying goods on credit 13.4 years 5. Average premium paid for goods bought on credit* 17.3% 6. Average of maximum that can be bought on credit Rs. 3420 7. Alternate to buying on credit a. another moneylender 72.25% b. friend 3.75% c. family/relatives 1.75% d. no one else 24% Table 3 – Meter loans for financing 1. % of sample size that takes daily loans 69.4% 2. % of sample size that takes daily loans for more than 15 days a month 65.7% 3. Average number of days in a month that respondent takes a daily loan for working 25.8 days capital 4. Average number of years of taking daily loans 9.5 years 5. Average daily interest rate 4.9% 6. % of total meter loan borrowers who borrow from the same moneylender daily 67.7% 7. Average of maximum that can be borrowed as a daily loan Rs. 4098.6 8. % of meter loan borrowers who feel there is no other way of doing business and 63.8% the interest is unavoidable Table 4 – Usage of savings products Usage by respondents Savings product (in %) Cash at home 77.5 Cash lent out 5.7 Cash saved with family/friends 1.5 Chit funds 11.2 MFI/SHG 29.2 Bank account 12.8 Gold 74.6 2 1000 Rs borrowed for 30 days a month at the average 4.9% rate of daily interest. 1000 Rs is close to the sample average for working capital on a normal day for those who make one trip a day. This is not taking into account variations in working capital needs on good days, low season and festival days. 3 Income calculations are made on the assumption, that the average respondent takes home 110 Rs daily.
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